Bengaluru: Karnataka is on the verge of becoming the first state to establish an investment trust (InvIT) for its power transmission assets, with a proposal on the issue being sent to the cabinet for discussion.
The proposal is aimed at monetising assets of Karnataka Power Transmission Corporation Ltd (KPTCL) a step which officials believe could unlock new revenue streams for the state.
Relying on expertise of Power Grid Corporation of India Ltd (PGCIL), which has successfully implemented its own InvIT, Karnataka plans to attract institutional and individual investors nationwide. The initiative stems from lessons gleaned by KPTCL officials from a recent Central Electricity Authority (CEA) conference, where strategies to monetise state transmission assets were shared.
“Subsequently, the finance department prepared a note on the formation of InvIT. We now need in-principle approval from the cabinet, which is expected soon,” an official said.
However, managing director Pankaj Kumar Pandey said KPTCL is reviewing the proposal in depth. “It is still in a nascent stage. We are studying pros and cons of setting up the InvIT,” Pandey said.
Sources say that while the concept will borrow elements from the PGCIL model, Karnataka’s InvIT will be tailored to the state’s unique requirements. “We plan to borrow only a portion of PGCIL InvIT and not base it wholly on the central govt undertaking,” an official said.
Critical areas under review include a payment security mechanism, division of KPTCL’s assets, and extent of monetisation feasible under the InvIT model. “We are yet to decide on how much money can be raised through InvIT. There is still a lot of work to be done,” officials added.
The govt is optimistic about the proposal’s potential to revolutionise asset management for power transmission corporations. If successful, the InvIT could become a significant milestone in Karnataka’s journey toward financial innovation and infrastructure development, while offering a fresh template for asset monetisation in India’s power sector, officials said.
